W2 to 1099 rate calculator for contractors
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W2 to 1099 rate calculator

Is $65 an hour on 1099 better than $55 an hour on W2? Enter a rate to see its equivalent, with the employer payroll taxes, benefits and unpaid time off taken into account.

W2 to 1099 rate calculator

$0/hrequivalent 1099 rate
$0yearly gross on 1099 (paid weeks only)
$0yearly gross on W2 (52 weeks)
+Math.round(n).toLocaleString('en-US')} function run(){var dir=$('c-dir').value,rate=parseFloat($('c-rate').value)||0,ben=(parseFloat($('c-ben').value)||0)/100,wk=Math.min(51,parseFloat($('c-wk').value)||0),hrs=parseFloat($('c-hrs').value)||40; var k=(1+0.0765+ben)/((52-wk)/52),r1099=dir==='w2'?rate*k:rate,w2=dir==='w2'?rate:rate/k; $('o-eq').textContent=f(dir==='w2'?r1099:w2)+'/hr';$('o-eq-l').textContent=dir==='w2'?'equivalent 1099 rate':'equivalent W2 rate'; $('o-yr').textContent=f(r1099*hrs*(52-wk));$('o-sal').textContent=f(w2*hrs*52);} ['c-dir','c-rate','c-ben','c-wk','c-hrs'].forEach(function(i){$(i).addEventListener('input',run)});run();})();

How the calculator works

  • Employer payroll taxes: on W2 the employer pays 7.65% for Social Security and Medicare. On 1099 you pay it yourself through self employment tax.
  • Benefits: health insurance, retirement match and other benefits a W2 employer may offer. Enter what they are worth to you as a share of pay.
  • Unpaid time off: on 1099 you are not paid for holidays, vacation or gaps between contracts.

The result is an estimate for comparing offers, not tax advice. Your real numbers depend on your state, your deductions and your benefits.

Find contract jobs with a stated hourly rate

Frequently asked questions

How do I convert a W2 rate to a 1099 rate?

Start from the W2 rate, add the 7.65% employer share of Social Security and Medicare you would now pay yourself, add the value of the benefits you lose, and adjust for the weeks you will not be paid. The calculator above does exactly that.

What is a good 1099 rate compared to W2?

A common rule of thumb is that a 1099 rate should be 20% to 40% higher than the equivalent W2 rate, depending on the benefits and paid time off you give up.

How do I turn an hourly rate into an annual salary?

Multiply the hourly rate by hours per week and by the number of paid weeks. At 40 hours a week and 52 paid weeks, $50 an hour is about $104,000 a year.

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